Can You Trade In a Financed Car?

Absolutely! However, trading in your vehicle does not mean that your loan disappears. You still have to pay off the balance. If you plan on trading in a vehicle but you are still making payments on that car, be sure to get familiar with the process of trading in your financed vehicle before you make a deal with Weir Canyon Acura near Costa Mesa. If you are unsure about the car financing process, don’t worry, because our finance experts would be glad to answer any questions that you may have.

Do You Have Positive or Negative Equity? 

When looking to trade in a car that’s not paid off, you’ll have to see which category of equity you fall into:

  • Positive Equity: Your car is worth more than what you still owe.
  • Negative Equity: Your car is worth less than what you still owe. 

To calculate which equity you have, you’ll have to find how much your current car is worth according to Kelley Blue Book® values and potential trade-in offers. If the trade-in offer is less than the amount you owe, then it is negative equity, but, if it is more than how much you still owe, then it is positive equity. Positive equity will make the trade-in process much easier as you don’t have to worry about outstanding payments and can use cash towards your next car.

Trading in a Car with Negative Equity

Even if you have negative equity, you might be wondering if you still have the option to trade in your car that’s not paid off. These might be some good options to consider: 

  • Make up the difference you still owe after accounting for the trade-in price. This is the first option you should consider since it can easily turn your situation for the better. While not everyone will have enough spare cash to do this, it will work in your favor if you do.
  • Another option is to transfer the amount you still owe over to a new loan. Most people choose this option when they have negative equity and want to trade in their current vehicle that’s not paid off. However, transferring the amount to your new loan can increase the monthly payment and in the end, you will still be paying for a car that you traded in. In other words, this will make you upside-down in your new loan. If you can’t keep up with your current car payments and you are downsizing with a cheaper car, this could be the best option for you.

How Does Trading In a Financed Car Work?

If what you still have to pay on the loan is less than what the car is actually worth, the dealer buying your vehicle will give you enough to pay the rest of the loan off. For example, if there is still $7,000 owed on your vehicle, and the dealer offers you $8,000 for it, the loan can be paid off and the dealership will then take the car. The $1,000 that is left over will be taken off the price of the new car that you buy.

What Does “Rolling Over” A Loan Mean?

Rolling over a loan is when a dealership offers to pay off your previous car regardless of the amount still owed on the loan. Keep in mind that the price will be added to your new loan on the next car you buy. You will end up paying the dealership back for the loan on your old car as you pay back the loan on the new car that you chose.

Find Affordable Auto Financing at Weir Canyon Acura

When you’re ready to trade in a financed car for lease or get behind the wheel of a new Acura, look no further than the extensive inventory of new Acura vehicles at Weir Canyon Acura near Tustin. We know that the car financing process can seem a bit overwhelming. That is why our finance experts are with you every step of the way or offer other features like how to calculate a car loan interest rate, how financing works, how to sell us your car, or good mileage for a used car. We strive to make car shopping hassle-free from start to finish. You can even learn more about fun things to do in RiversideContact us if you have any questions, or stop by our Anaheim dealership today.

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